PM steps in, sets up inflation cell

The Centre has reacted by banning exports of several essential commodities and moderating prices of foodstuff like onions and pulses, but with limited success.

The letter urges the CMs to take steps to curb 8220;malpractices, profiteering and hoarding8221; in their states. Singh draws attention to the various steps taken by the Centre to curb inflation and admits that 8220;prices of some of the commodities has also been fuelled by speculation in the market8221;.

The note points out that the 8220;Forward Market Commission has banned trading in urad and tur8221; and asks the CMs to ensure there is a strong monitoring of the 8220;activities of anti-social persons who may indulge in speculation and profiteering8221;.

8220;I look forward to your personal intervention to help control prices and for ensuring adequate supplies of essential commodities to the consumers,8221; he tells the CMs.

Later today, the Cabinet Committee on Prices CCP chaired by the PM reviewed the price situation, including rising onion prices, and decided to take measures like cutting taxes and improving supply of essential commodities.

8220;The CCP reviewed the prices and decided that the government will take all the steps 8212; fiscal, monetary and supply management 8212; to moderate inflation,8221; Finance Minister P Chidambaram told reporters after the meeting.

Earlier, Agriculture Minister Sharad Pawar briefed the committee on the scheduled arrival of new crop of essential stuff including fruit, vegetables, wheat and pulses.

Asked if futures trading in agricultural commodities could be banned to contain inflation, Chidambaram said the Parliamentary Standing Committee had finalised its report on the issue and 8220;the final view will be taken by Ministry of Agriculture8221;.

On the issue of soaring onion prices, the he said, 8220;I have no magic wand to control onion prices.8221;

The likely role of speculation in rising prices has been a sore issue among politicians and experts recently. Agriculture minister Sharad Pawar on Wednesday admitted that he was under pressure to stop futures trading. 8220;I do not know how long I will be able to resist banning it,8221; he said.

Market experts, however, insist that it is supply crunch, not futures trading, that has been stoking prices.

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